Who Will Get Health Insurance Rebate Checks?

Health insurance premiums have been on the rise for years but the Affordable Care Act (ACA) introduced new rules to ensure that insurers spend a certain percentage of premiums on medical claims quality improvement activities. If insurers fail to meet these rules they must issue rebate checks to their policyholders.

The Medical Loss Ratio (MLR) Rule

The ACA’s MLR rule requires insurers to spend at least 80% of premiums on medical claims quality improvement activities in the individual small group markets. In the large group market insurers must spend at least 85% of premiums on these activities. Insurers who fall short of these thresholds must issue rebate checks to their policyholders.

Rebate Eligibility

If an insurer fails to meet the MLR rule they must issue rebate checks to policyholders who were enrolled in the affected plans during the rebate year. The rebate year is generally the calendar year before the year the rebates are issued.

Policyholders who received rebates must have had an active policy at some point during the rebate year. If a policyholder had coverage for only part of the year their rebate will be prorated based on the number of months they were enrolled.

Rebate Amounts

Rebate amounts can vary based on several factors including the number of policies affected the insurer’s total premium revenue the state in which the policies are issued. Additionally certain states may have their own MLR rules that require higher spending thresholds for insurers.

If an insurer issued a rebate to a policyholder in the previous year they may offset this year’s rebate with any outstanding premium amounts owed by the policyholder. Alternatively they may issue a cash rebate or apply the rebate amount as a credit to the policyholder’s account.

Conclusion

If your health insurance company fails to meet the ACA’s MLR rules you may be eligible for a rebate check. Eligibility rebate amounts depend on several factors but if you met the criteria you should receive the rebate automatically either as a cash payment or a credit to your account.